Tag: trade

The pan-European Stoxx 600 index sank 0.3 percent as traders kicked off Monday’s session, with most sectors and major bourses in the red. Market players monitored news of slowing growth in the world’s second-largest economy. It’s the latest sign of weakness in the Chinese economy, and comes at a critical time in Beijing’s trade battle with the United States. Meanwhile, traders await British Prime Minister Theresa May’s announcement of a “Plan B” for Brexit which she is due to present in parliame

The pan-European Stoxx 600 index sank 0.3 percent as traders kicked off Monday’s session, with most sectors and major bourses in the red.

Market players monitored news of slowing growth in the world’s second-largest economy. Official data published Monday said China’s gross domestic product (GDP) in 2018 grew 6.6 percent from the previous year, in line with analyst expectations but at its most sluggish rate in almost three decades.

It’s the latest sign of weakness in the Chinese economy, and comes at a critical time in Beijing’s trade battle with the United States. The two countries have been locked in a tense sparring of tariffs since the start of last year, but are currently trying to prevent any further escalation over the course of a 90-day truce.

Over the weekend, President Donald Trump said a trade deal with China “could very well happen,” but denied what he called “false reports” that the U.S. was considering lifting duties on Chinese imports.

Meanwhile, traders await British Prime Minister Theresa May’s announcement of a “Plan B” for Brexit which she is due to present in parliament later on Monday.

Last week, U.K. lawmakers rejected May’s EU withdrawal agreement, an event that was largely expected. The prime minister subsequently won a confidence vote that was tabled by opposition leader Jeremy Corbyn, albeit by a slim margin of 19 votes.

Sterling was barely changed in early morning trade, trading just below the flatline at $1.2871.

In corporate news, Logitech is due to report third-quarter results on Monday.

In terms of data, Germany’s December Producer Price Index (PPI) will be released at 2 a.m. ET.

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations. While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers. “Falling producer prices and new export orders point to a slowdown in China’s grow

Asia Pacific markets started the trading week with gains despite China reporting that its economy grew at the lowest official pace in 28 years.

The world’s second-largest economy grew 6.6 percent in 2018, which matched analysts’ expectations, and was lower than a revised 6.8 percent growth in 2017. Fourth quarter GDP growth was 6.4 percent, which was also in line with expectations.

“I think what we’re seeing actually in the fourth quarter is that while the economy is decelerating, we actually still have some of the supports,” Helen Zhu, head of China equities at Blackrock, told CNBC’s “Street Signs” on Monday. “For example, for most of the quarter, from the export front loading impact that we had probably before the Argentina G-20 (summit) when people’s expectations regarding trade became a little bit more optimistic.”

Chinese President Xi Jinping and U.S. President Donald Trump agreed to a 90-day pause in tariff escalation at the G-20 summit in Argentina late in 2018.

While Beijing’s official GDP figures are seen as one of the crucial indicators of China’s economic health, many outside experts have expressed skepticism about the veracity of the numbers.

Raymond Yeung, chief economist for Greater China at the Australia and New Zealand Banking Group, wrote in a note that China’s GDP numbers are “not an accurate gauge” of its economic growth. Still, he pointed out, the gap between the actual figures and the official targets usually shapes the government’s policy stance.

“Falling producer prices and new export orders point to a slowdown in China’s growth momentum,” Yeung added. “To celebrate the 70th anniversary of the founding of the People’s Republic of China in 2019, President Xi (Jinping) will still likely launch growth-supportive policies.”

The mainland Chinese markets, closely watched as a result of the ongoing U.S.-China trade fight, saw gains on the back of the data release. The Shanghai composite rose more than 0.5 percent to close at about 2,610.51 while the Shenzhen composite gained 0.607 percent to end its trading day at around 1,330.17. The Shenzhen component also advanced 0.592 percent to close at approximately 7,626.24.

The dollar held steady near a two-week high against a basket of currencies on Monday, as investor risk appetite held up despite the latest data showing China’s 2018 economic growth slowing to a near three-decade low. Along with a decline in Treasury yields earlier in the month which had accompanied the retreat in equities, the dollar index had slipped to a three-month low near 95.00 on Jan. 10. “Whether the current ‘risk on’ supporting the dollar can continue will likely depend on how U.S. corpo

The dollar held steady near a two-week high against a basket of currencies on Monday, as investor risk appetite held up despite the latest data showing China’s 2018 economic growth slowing to a near three-decade low.

The dollar index, which measures its strength against a group of six major currencies, was steady at 96.308 after climbing to 96.394 percent on Friday, its strongest since Jan. 4.

Hopes for a thaw in U.S.-China trade tensions, a more dovish-sounding Federal Reserve and optimism that Britain could avoid a “No-Deal” Brexit are some of the factors that have fanned the return in investor risk appetite, which went into a deep freeze in December as global equity markets tumbled.

Along with a decline in Treasury yields earlier in the month which had accompanied the retreat in equities, the dollar index had slipped to a three-month low near 95.00 on Jan. 10.

“The dollar index is clearly on a recovery track. The currency was stuck in a downtrend at the start of January but is now being bought back against its peers such as the yen, euro, pound and the Aussie,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“Whether the current ‘risk on’ supporting the dollar can continue will likely depend on how U.S. corporate earnings turn out. The United States and China falling out again over trade issues and volatile U.S. politics still remain the main potential risk factors.”

The U.S.-China trade friction has already put pressure on China’s economy, with the latest data showing the world’s second-biggest economy slowing further in the last quarter of 2018. Markets appeared to take the outcome, largely in line with expectations, in their stride.

The dollar was down 0.1 percent at 109.64 yen, taking a pause after climbing to a three-week high of 109.895 on Friday. The greenback had gained more than 1 percent against its Japanese peer last week.

The euro nudged up 0.15 percent to $1.1376 but remained in close reach of a two-week low of $1.1353 brushed on Friday.

The pound was 0.1 percent lower at $1.2860.

Sterling had climbed to a two-month peak of $1.3001 on Thursday on growing confidence that Britain can avoid leaving the European Union without a deal, but faced profit-taking on Friday.

“The pound is at current levels based on assumption that a no deal Brexit has been avoided. But even an exit with a deal will likely leave some damage on the economy, so it is difficult to see the pound make much further headway from here,” said Koji Fukaya, president at FPG Securities in Tokyo.

British Prime Minister Theresa May will on Monday put forward a motion on her proposed next steps. Over the following week, lawmakers will be able to propose alternatives. They will debate these plans on Jan. 29, and voting on them should indicate whether any could get majority support.

The Australian dollar was steady at $0.7166 after ending Friday on a loss of 0.3 percent.

The Aussie was largely unfazed by China’s growth numbers though analysts agree that any sharp drop in demand from its biggest trading partner would put a dent in local assets.

Australia’s close trading links with the world’s second-biggest economy means its currency is often regarded as a proxy to China-related trades.

The 10-year Treasury note yield rose to a three-week high of 2.799 percent on Friday, continuing its rise from a one-year low of 2.543 percent plumbed early in January.

The U.S. financial markets will be closed on Monday for Martin Luther King Jr. Day.

The U.K.’s international trade minister said on Sunday that the Brexit process was at risk of being “hijacked” by ‘Remainers’ within parliament. May is expected to address Parliament on Monday afternoon and to set out how she intends to deal with the Brexit deal impasse. Remainers and Brexiteers remain at loggerheads over Brexit and what level of closeness the U.K. should have to the bloc in future, however. “You’ve got a ‘leave’ population, and a ‘remain’ parliament,” Liam Fox told the BBC on S

The Irish “backstop” – a fall-back option intended to keep the Irish/Northern Irish border open if the U.K. and EU fail to strike a trade deal in a 21-month transition period following the departure date in March 2019 – has been a key stumbling block in Brexit negotiations.

It’s controversial as it would mean that Northern Ireland, a part of the U.K., stays roughly aligned to the rules of the EU’s single market in a bid to avoid a “hard” border with Ireland. That has proved controversial for lawmakers across the spectrum and May was expected to focus on resolving the backstop issue in a bid to persuade politicians within her own Conservative party and the opposition to back her deal.

The U.K.’s international trade minister said on Sunday that the Brexit process was at risk of being “hijacked” by ‘Remainers’ within parliament. May is expected to address Parliament on Monday afternoon and to set out how she intends to deal with the Brexit deal impasse.

Remainers and Brexiteers remain at loggerheads over Brexit and what level of closeness the U.K. should have to the bloc in future, however.

“You’ve got a ‘leave’ population, and a ‘remain’ parliament,” Liam Fox told the BBC on Sunday.

“Parliament has not got the right to hijack the Brexit process … What we are now getting are some of those who were always absolutely opposed to the result of the referendum trying to hijack Brexit and in effect steal the result from the people.”

Meanwhile, the Shadow Brexit Secretary Kier Starmer said that the U.K. now needed to be “realistic about what the options are” when he spoke to the BBC’s Andrew Marr show Sunday.

Kamal Sharma, director of G10 FX Strategy for Europe at Bank of America Merrill Lynch, told CNBC on Monday that the direction May’s deal will take, and how the wider Parliament reacts to it, is crucial this week.

“There’s been very interesting developments over the weekend, it does seem that the Conservative party still is grappling with itself rather than a negotiation between itself and the EU,” he told CNBC’s Squawk Box Europe.

“So while Parliament doesn’t actually have a ‘Plan B’ — whether it be a customs union or a ‘Norway plus’ arrangement — it does have a majority for a no-deal, so what will be more important this week will be those amendments that come through and the power of those amendments in terms of votes.”

A ‘Norway plus’ arrangement (so-called as it’s the trade deal that Norway has with the EU) would mean that the U.K. is not a member of the EU but is in the European Economic Area and part of the single market.

Tax cuts in China could be at the center of Beijing’s fight against a slowing economy amid an ongoing trade spat with the U.S., experts said. “Fiscal policy will be the front line of defense against mounting macroeconomic headwinds in 2019,” Haibin Zhu, J.P. Morgan’s chief China economist, wrote in a recent note. The challenges in China’s economy are already starting to show. That comes amid signs of softening demand — with recent data pointing to weaker exports and a slowdown in manufacturing a

Tax cuts in China could be at the center of Beijing’s fight against a slowing economy amid an ongoing trade spat with the U.S., experts said.

“Fiscal policy will be the front line of defense against mounting macroeconomic headwinds in 2019,” Haibin Zhu, J.P. Morgan’s chief China economist, wrote in a recent note.

The challenges in China’s economy are already starting to show. On Monday, Beijing reported its slowest GDP growth in decades, with official data showing that the economy grew 6.6 percent in 2018 compared to a year ago — it’s slowest rate of expansion since 1990.

That comes amid signs of softening demand — with recent data pointing to weaker exports and a slowdown in manufacturing activity — as the trade war with the U.S. appears to be taking a toll. Analysts such as Zhu say that Beijing will need to turn to fiscal measures, which typically means boosting government spending and cutting taxes, in order to stimulate the economy.

The Middle East’s largest public company is expanding its investments in China despite an expected slowdown in the country’s economic growth, its CEO said Monday. Investors and analysts have raised concern over China’s growth outlook, which has been dampened by weakened domestic demand and the trade war with Washington that’s hit exports. But SABIC, which is also the fourth-largest petrochemicals producer in the world, plans to keep investing in China. “I think Asia is growing and China is reall

The Middle East’s largest public company is expanding its investments in China despite an expected slowdown in the country’s economic growth, its CEO said Monday.

Speaking to CNBC during the World Economic Forum in Davos, Switzerland, Yousef Al-Benyan, chief executive of Saudi Arabian petrochemicals manufacturer SABIC, dismissed growing concerns about the future of the world’s second-largest economy.

“If you are a long-term player I think this is normal in any economy, they have to go through sometimes a bumpy road. And that is, I think, what we experienced with China today,” Al-Benyan told CNBC’s Hadley Gamble, referencing the ongoing trade war between China and the U.S. That, he said, “has really influenced some of the growth we expect out of China, but from a SABIC perspective we look at China as long term,” he said.

Investors and analysts have raised concern over China’s growth outlook, which has been dampened by weakened domestic demand and the trade war with Washington that’s hit exports. A recent Reuters poll found that the country’s growth is expected to slow to 6.3 percent this year from an expected 6.6 percent in 2018, which would be the lowest in 29 years. That figure was 6.9 percent in 2017.

But SABIC, which is also the fourth-largest petrochemicals producer in the world, plans to keep investing in China.

“I think Asia is growing and China is really driving this growth,” Al-Benyan said. “That is why we have improved our presence in China specifically, we are trying to put even more investment in China because we think the growth is there.”

Baidu ended the year with a 32 percent loss, while Tencent was down 23 percent, and Alibaba dropped 21 percent. And it’s Tencent that’s flashing a buy signal, says Craig Johnson, chief market technician at Piper Jaffray. “If I look at the chart of Tencent, here’s a stock that’s traded off meaningfully. A key technical indicator, its moving average convergence divergence (MACD), is also suggesting a bullish lean to the stock, says Johnson. A stock’s MACD demonstrates the correlation between a 26-

Even with the U.S.-China trade war still raging, Chinese stocks are on fire.

Increasing trade tensions between the U.S. and China through the back-half of 2018 took a sledgehammer to Chinese shares. Baidu ended the year with a 32 percent loss, while Tencent was down 23 percent, and Alibaba dropped 21 percent.

However, the FXI China large-cap ETF has surged 7 percent in the past three months, while U.S.-listed China-based stocks such as Baidu, Alibaba, Tencent and Sina have rallied by at least 8 percent to begin 2019. And it’s Tencent that’s flashing a buy signal, says Craig Johnson, chief market technician at Piper Jaffray.

“There’s certainly some opportunities to trade here,” Johnson said on CNBC’s “Trading Nation” on Friday. “If I look at the chart of Tencent, here’s a stock that’s traded off meaningfully. We’ve now just reversed the downtrend.”

Tencent had plummeted 47 percent from its January peak last year to its trough last October. Since that bottom, it has rallied 35 percent to four-month highs.

A key technical indicator, its moving average convergence divergence (MACD), is also suggesting a bullish lean to the stock, says Johnson. A stock’s MACD demonstrates the correlation between a 26-period exponential moving average and a 12-period exponential moving average. When measured against a baseline, the indicator can suggest bullish or bearish momentum.

“When we’ve seen a MACD buy signal happen like we have right here, we’ve seen that 30 days later that the stock is typically up almost 13 percent,” Johnson explained. “This would be one we’d be buying.”

President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs on Chinese imports. “If we make a deal certainly we would not have sanctions and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very well happen with China. Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the next round of trade negotiations with W

President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs on Chinese imports.

“Things are going very well with China and with trade,” he told reporters at the White House, adding that he had seen some “false reports” indicating that U.S. tariffs on Chinese products would be lifted.

“If we make a deal certainly we would not have sanctions and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very well happen with China. It’s going well. I would say about as well as it could possibly go.”

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the next round of trade negotiations with Washington.

That follows lower-level negotiations held in Beijing last week to resolve the bitter dispute between the world’s two largest economies by March 2, when the Trump administration is scheduled to increase tariffs on $200 billion worth of Chinese goods.

According to sources briefed on the ongoing negotiations, cited exclusively by Reuters on Friday, the United States is pushing for regular reviews of China’s progress on pledged trade reforms as a condition for a trade deal — and could again resort to tariffs if it deems Beijing has violated the agreement.

“The threat of tariffs is not going away, even if there is a deal,” said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.

Chinese negotiators were not keen on the idea of regular compliance checks, the source said, but the U.S. proposal “didn’t derail negotiations.”

A Chinese source said the United States wants periodic assessments but it was not yet clear how often.

“It looks like humiliation,” the source said. “But perhaps the two sides could find a way to save face for the Chinese government.”

The Trump administration has imposed import tariffs on Chinese goods to put pressure on Beijing to meet a long list of demands that would rewrite the terms of trade between the two countries.

The demands include changes to China’s policies on intellectual property protection, technology transfers, industrial subsidies and other trade barriers.

The Wall Street Journal reported Thursday that the U.S. could ease trade tariffs against China. The suggestion reportedly came from Treasury Secretary Steven Mnuchin, but faced pushback from U.S. Trade Representative Robert Lighthizer. Wall Street rallied on the news but pared some of those gains after a senior government official told CNBC that Mnuchin had not made any such recommendations. ET, the New York Fed President John Williams will speak in Somerset, New Jersey. ET, Philadelphia Fed Pre

The Wall Street Journal reported Thursday that the U.S. could ease trade tariffs against China. The suggestion reportedly came from Treasury Secretary Steven Mnuchin, but faced pushback from U.S. Trade Representative Robert Lighthizer. Wall Street rallied on the news but pared some of those gains after a senior government official told CNBC that Mnuchin had not made any such recommendations.

Money managers were also following U.S. politics as the government shutdown continues into its 28th day.

In terms of economic data, there will be industrial production figures out at 9:15 a.m. ET and consumer sentiment numbers due at 10:00 a.m. ET.

No Treasury auctions were scheduled for Friday.

Elsewhere, at 9:05 a.m. ET, the New York Fed President John Williams will speak in Somerset, New Jersey. Slightly after that, at 11:00 a.m. ET, Philadelphia Fed President Patrick Harker will address a Symposium in Philadelphia.

President Donald Trump and his cabinet are skipping out on Davos this week, but he’ll still be the biggest presence at the annual gathering of the world’s richest and most powerful people. “Donald Trump will be a predominant voice at Davos regardless of whether he’s there,” Tom Nides, a Morgan Stanley vice chairman and former deputy secretary of State, said in an interview. “The most important thing people are worried about globally is the U.S.-China trade relationship and the health of the glob

President Donald Trump and his cabinet are skipping out on Davos this week, but he’ll still be the biggest presence at the annual gathering of the world’s richest and most powerful people.

Whether it’s the U.S.-China trade dispute, Trump’s reported wish to withdraw from NATO, or the government shutdown threatening the world’s biggest economy, it’ll be hard to avoid discussing Trump at the World Economic Forum’s meeting in the Swiss ski town of Davos.

“Donald Trump will be a predominant voice at Davos regardless of whether he’s there,” Tom Nides, a Morgan Stanley vice chairman and former deputy secretary of State, said in an interview.

“The most important thing people are worried about globally is the U.S.-China trade relationship and the health of the global economy,” Nides said. “The reality is, the U.S. is a massive player in all conversations around Davos, and because Donald Trump has decided to be relatively controversial, that increases the likelihood that the conversations in the hallways are about Donald Trump.”

As 2019 begins, uncertainty is the only certainty. Trump, in the midpoint of his term, is grappling with showdowns at home and abroad, and repercussions are being felt around the world. His games of brinkmanship top the list of potential risks, along with Brexit, that could cripple economic growth.

Anxiety about the end of the old world order is sure to be on the minds of the Davos set – a list of attendees including billionaires Bill Gates, Ray Dalio and George Soros – a group who have been huge beneficiaries of the stability of the previous era.

“The American order is over, and we don’t know what the next order will be yet,” said Ian Bremmer, founder of consultancy Eurasia Group. “It’s a much more dangerous, chaotic period we are entering, and what people attending Davos need to think about is how to ensure resilience given the coming shocks.”

When Trump attended Davos last year to articulate his “America First” worldview and boast about the virility of the U.S. economy, he had a surging stock market and recent corporate tax cut to crow about. “America is open for business, and we are competitive once again,” he told the Davos crowd in 2018.

Now, with swaths of the U.S. government literally closed and 800,000 federal employees going without pay, economists are increasingly alarmed at the fallout, saying that if it persists, the longest shutdown in history could wipe out economic growth.